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DWP officials refuse to answer rate hike questions

Los Angeles Department of Water and Power officials failed to appear at meetings today examining whether they tried to extort the City Council into approving an electricity rate hike in April.

The council's Audits and Governmental Efficiency Committee and Energy and Environment Committee held a joint meeting to discuss the issue today, but DWP officials snubbed it.

Interim DWP General Manager Austin Beutner instead sent a letter, stating he would not respond until an ongoing internal investigation was done.

Councilman Paul Krekorian was outraged.

"I think where that leaves us is profoundly stonewalled by the DWP, and I can't begin to express in strong enough terms how offensive I find it,'' he said.

The committees invited DWP officials to respond to an audit released by City Controller Wendy Greuel. The audit concluded that the DWP had no basis to say it was not financially able to remit $73.5 million to the city, unless the council first approved an electricity rate hike.

"It's hard to look at these numbers and not say that the DWP was trying to extort the City Council into passing its proposed (rate) increase,'' Greuel had said.

The committees decided today to forward the audit to the full council.

Councilman Paul Koretz also instructed the City Attorney's Office to report whether any of the alleged misconduct detailed in the audit "rises to a criminal level and, if so, what can be done about it?''

Koretz said if Beutner skips the council meeting as well, he would take legal action.

"I would also ask that we subpoena the general manager of the DWP to actually show up in council and provide information and answer any questions that we have,'' Koretz said.

Beutner had not been appointed general manager when the DWP and council were bickering over the electricity rate hike. He has previously said he wants to "look forward, not back'' and also vowed to increase transparency at the DWP.

But Krekorian said Beutner's decision not to attend the joint meeting today is "again a real indication of institutional arrogance.''

The DWP has traditionally remitted 8 percent of its surplus revenue from its electricity operations to the city every fiscal year.

In February, the utility made the first installment of $147 million. In March, however -- when the council was challenging the proposed electricity rate hike -- then-interim general manager S. David Freeman and chief operating officer Raman Raj refused to remit the remaining $73.5 million.

They said transferring the money without first securing an electricity rate hike would put the DWP's bond rating in jeopardy. The city had been counting on the money to help pay its bills and reduce its budget deficit.

Greuel said last month her audit confirmed that the DWP had the money available to make the $73.5 million transfer, "and could have done so without putting itself in any financial jeopardy.''

"My audit lays out in detail, that none of the reasons given by the DWP for refusing to transfer the money are supported by the facts,'' Greuel said.

"As of April 1, the DWP's Power Revenue Fund had approximately $752 million dollars in it, more than enough money to transfer the $73.5 million to the city.''

The DWP and Board of Water and Power Commissioners eventually remitted the money -- but only after the council agreed to an electricity rate hike, though a much smaller one than the DWP had sought.